NITA summarises the Chancellor’s Autumn Statement and how it will impact the Industry

NITA summary of the Chancellor’s Autumn Statement and how it will impact the Industry

Yesterday ((Thursday 17th November) the Chancellor announced his Autumn Statement, aiming to restore stability to the economy, protect high-quality public services and build long-term prosperity.

Download – Autumn Statement 2022: documents – GOV.UK (www.gov.uk)

Most of the measures contained in the Chancellor’s Autumn Statement has been covered in the press, such as the additional income tax rate changes, the triple-lock on pensions, and the targeting of energy support next year following the end of the existing relief schemes. Tourism and hospitality didn’t feature at all in the Chancellor’s statement, however there were some announcements that will be of interest that we have detailed below.

One interesting point is that up to £2M has been committed for an NI Trade and Investment event due to take place in 2023 to showcase NI as an attractive place to do business.

Overall Fiscal Position for NI – As a result of the Autumn Statement, NI will receive an additional £650M over the years 23/24 and 24/25. In resource and capital terms:

Budget Type2022/20232023/20242024/2025
Resource13.4bn13.5bn13.6bn
Capital2.1bn2.0bn1.8bn

Energy Support

  • Energy Bill Relief Scheme (EBRS) – The roll-out of the EBRS for non-domestic customers starts this month and you should see discounts relating to the energy price guarantee automatically applied to your bills. Note: this only applies to wholesale prices of electricity and the government have not capped supplier charges. If you have any queries about how this is being applied you should contact your supplier in the first instance.
  • Alternative Fuels – In the Autumn Statement, the Chancellor announced an increase from £100 to £200 in support for those using alternative heating sources, such as oil. Given the complexity of the market in NI, every household will receive the £200, meaning every household will received £600 credit through their electricity supplier. For all UK non-domestic customers who use alternative fuels for heating there is a fixed £150 credit. There is an additional top-up payment available for large non-domestic users of heating oil which will be based on usage
  • Energy Bill Relief Scheme (EBRS) review – This scheme is due to come to an end on 31st March 2023 and unlike the household scheme which will continue for a further 12 months (with an increased EPG of £3000), the decision on extending support for non-domestic customers will based on the EBRS Review being carried out by HM Treasury. What we do know is that any support will be ‘significantly lower, and targeted and those most affected to ensure fiscal sustainability and value for money for the taxpayer’.  The terms of reference for the review are available at Terms of Reference: Review of the Energy Bill Relief Scheme – GOV.UK (www.gov.uk). Previously we distributed the EBRS survey which will provide evidence to the review. HMT are expecting to publish the results of their review before Christmas so anyone wishing to make a case directly must do so quite quicky. If you wish to submit any evidence use the email address ebrsreview@beis.gov.uk.

Other Announcements

  • National Living Wage, which applies to people over 23 years old, will increase from £9.50 to £10.42 an hour from April 2023. The other National Minimum Wage rates will also increase, from 1 April 2023, as follows:
    • Increasing the rate for 21-22 year olds by 10.9% to £10.18 an hour;
    • Increasing the rate for 18-20 year olds by 9.7% to £7.49 an hour;
    • Increasing the rate for 16-17 year olds by 9.7% to £5.28 an hour;
    • Increasing the apprentice rate by 9.7% to £5.28 an hour; and
    • Increasing the accommodation offset rate by 4.6% to £9.10 an hour
  • National insurance – The NICs secondary threshold for employers will remain at £9,100 until April 2028. The Employment Allowance will be retained at its new higher level of £5,000.
  • Dividends – The dividend allowance will be cut from £2,000 to £1,000 from April 2023, and then to £500 from April 2024.
  • Capital Gains Tax – The Annual Exempt Amount for Capital Gains Tax will be cut from £12,300 to £6,000 from April 2023, and then to £3,000 from April 2024.
  • Dividends – The dividend allowance will be cut from £2,000 to £1,000 from April 2023, and then to £500 from April 2024.
  • Research and development Tax relief – The deduction rate for the SME scheme for R&D tax relief will be cut to 86% (from 130%) and the credit rate reduced to 10% from 14%. The rate of the separate R&D expenditure credit will increase from 13% to 20%.
  • Electric Vehicle Charge Points – The 100% first year allowance had been extended to 31st March 2025 for corporation tax purposes.

Finally, you may have been aware that the UK Government had commissioned the Migration Advisory Committee to review the Shortage Occupation List.

This review was due to start in October, but due to further clarifications requested by MAC, it has been delayed and as yet there is no indication if this will start before the Christmas break. Once the review starts, NITA will be working with members to ensure that the unique position and challenges of tourism and hospitality sectors in NI, along with potential solutions to address will be submitted.